Toronto-Dominion Bank Q2 2020 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : First question on earnings. I mean you are hearing that this quarter earnings don't matter, but eventually, people will care about earnings that pay the dividend and contribute to your capital generation. I wanted to kind of talk in the earnings outlook to your stress scenarios, your internal stress test. I'm not sure you've done it like other banks, and in whatever scenario, your core Tier 1 doesn't fall below x, whatever that is. One of the components of that type of projection would be earnings. I'm just wondering what kind of earnings levels or generation or growth do you have in those types of scenarios.

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : I guess what I'm after, though, is, as Ajai said, you've got an extended period for when you expect economic activity to return to normal levels. What does that -- what are your earnings projections like in that sort of scenario? Is it back to 2019 sort of profitability, by 2022, '23 or something other than that?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : And okay. My other question, I'll make it quick, on credit. Some banks have talked about the Q3, Q4, expect performing provisions to decline from this quarter's level, performing being the operative word. What about impaired provisions? They're going to be picking up. Is it going to -- you'll have movements out of stage 2 into stage 3. Are they going to offset each other? Or could -- the pickup in stage 3 provisions keep what we're seeing today at that level for a number of quarters?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Mine's a pretty quick one. When I look at the oil and gas disclosure, to me, it was surprising. The proportion that was noninvestment-grade, would this have been, broadly speaking, a reflection of the credit quality origination as well? Or is this after you've taken downgrades that have taken them into noninvestment-grade territory?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : So Ajai, if I could just have a quick follow-up on that. When you look at that portion that was downgraded, can you give me a sense of how much of those that were downgraded would have been originated in the last 12 to 18 months?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : I just want to know if there was a skew towards the more recent vintages. There's been pretty good growth in Bob's business. I just want to have a feel for how much of it has been maybe late into the -- or late cycle growth, so to speak.